Innovate UK is opening up £8m in funding for small companies with big ideas that could help “tackle the biggest healthcare challenges” facing the UK.

The UK’s innovation agency, which is an arm’s-length body of the Department of Business, Energy and Industrial Strategy, is looking for SMEs from the UK digital sector to submit ideas for feasibility studies or product-development projects.

The agency is seeking initiatives that will improve patient outcomes, demonstrate new and transformative ways of delivering healthcare, and reduce demands on the health service while delivering savings or efficiencies.

The competition, which has an £8m funding pot, begins today and remains open for submissions until 4 October. Winning projects will receive up to 70% of eligible costs.

Feasibility studies of up to one year’s duration could receive backing of between £50,000 and £70,000. Industrial research or development projects, meanwhile, could garner a cash injection of between £500,000 and £1m over a three-year lifespan.

To qualify for the competition, all projects must begin by 1 February 2018 and be led by a UK-based SME, working alone or in unison with other companies.

Innovate UK said that the competition forms part of the government’s Industrial Strategy Challenge Fund, the “digital health technology catalyst” strand of which will invest £35m of funding in the next four years.

The agency said: “The aim is to support the development of digital health products that meet NHS needs.